On Monday, Roku Inc. (NASDAQ:ROKU) shares edged lower by 2.9% despite an upbeat mood towards streaming services. Analysts are hyping streaming service providers this holiday season driven by the new threat of the Omicron variant.
Roku could also benefit significantly from holiday season sales after partnering with Walmart Inc. (NYSE:WMT) for the budget-priced $15 Roku LE Player. The analysts are raising their expectations on indoor service providers in anticipation of a rise in subscribers amid fears of the new covid variant.
Should you bet on Roku’s growth?
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From an investment perspective, Roku shares trade at steep valuation multiples, making the stock too expensive for value investors.
However, analysts seem optimistic about its growth potential. They expect its EPS to rocket by nearly 73% this year, before growing at an average annual rate of 64.40% over the next five years.
Therefore, the stock looks like an exciting option for long-term growth investors. The stock has plunged more than 50% since the 26th of July, creating an attractive entry opportunity.
Technically, Roku stock seems to be trading within a sharply descending channel formation in the intraday chart. As a result, shares have fallen deep into oversold conditions, creating a perfect opportunity for a rebound.
Therefore, investors could target potential rebounds at about $255.98, or higher at $282.92, while $204.35 and $177.20 are support levels.
In summary, the recent decline in ROKU stock seems to have created an opportunity to buy.
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